Kenya’s evolving jurisprudence signals a justice system confident enough to embrace both protection and autonomy. -Doreen Kibia
Kenya’s approach to employment disputes is evolving in remarkable ways. While the Employment and Labour Relations Court (ELRC) retains exclusive jurisdiction over employment matters, an emerging legal argument is reshaping the conversation. It suggests that this jurisdiction does not, in itself, prevent parties from voluntarily choosing arbitration as their preferred path to resolution.
At the heart of this debate lies a simple yet important question: are arbitration clauses in employment contracts valid and enforceable?
Opponents of arbitration in employment relationships often rely on statutory interpretation. They point to the Industrial Court Act, which omits arbitration from the dispute resolution mechanisms the ELRC may employ. This reasoning was adopted in Dr. Kennedy Amubaya Manyonyi v. African Medical and Research Foundation (2014) eKLR and reaffirmed in Steve Okeyo v. Board of Directors, HHI Management Services Limited [2024] KEELRC 100 (KLR). Both decisions leaned on the view that the law does not envisage arbitration in employment disputes. Yet such a position risks a narrow interpretation of justice that overlooks the constitutional principles underpinning Kenya’s legal framework.
The Constitution of Kenya (2010) paints a broader and more inclusive picture. Article 159(2) expressly recognises arbitration as one of the legitimate forms of alternative dispute resolution. To exclude it simply because the ELRC has exclusive jurisdiction would, in effect, undermine the spirit of the Constitution, which encourages efficiency, flexibility, and access to justice through diverse means.
The absence of arbitration from the Industrial Court Act can be understood within its context. Arbitration is founded on mutual consent. Unlike conciliation or mediation (Court Annex Mediation), it cannot be imposed by judicial direction. It operates where parties, acting freely, choose to entrust their dispute to a neutral tribunal of their own making.
This constitutional view is supported by the Supreme Court’s reasoning in Synergy Industrial Credit Ltd v. Cape Holdings Ltd (2019) KESC 12 (KLR). The Court reaffirmed that judges must interpret arbitration law in a manner that gives life to Article 159’s principles. While arbitration stands independent of the courts, the judiciary remains its guardian, stepping in only to preserve fairness, not to frustrate it.
A familiar concern in employment arbitration is the question of unequal bargaining power. The ELRC has, on occasion, viewed arbitration clauses in employment contracts with caution, mindful that an employee might have had little room to negotiate such terms. However, that concern loses force when the party resisting arbitration is the same one that drafted and proposed the arbitration clause. In such cases, it becomes difficult to sustain a claim of coercion.
The recent judicial reasoning around this issue marks an encouraging shift. It recognises that the law’s purpose is not to deny arbitration altogether but to protect employees where genuine inequality exists at the point of contract formation. Employees are shielded from unfairness that may arise from a lack of bargaining power, while the principle of party autonomy remains respected. This balance strengthens the integrity of employment relations and reinforces confidence in Kenya’s justice system.
Under the Arbitration Act, 1995, an arbitration agreement is one where parties agree to submit “all or certain disputes” arising out of “a defined legal relationship, whether contractual or not.” Employment relationships, being clearly defined and contractual, fall within this framework when the agreement is entered into voluntarily and in good faith.
The future of employment dispute resolution in Kenya should not be seen as a contest between courts and arbitration. It is an opportunity to build a more responsive, accessible, and humane justice system. Arbitration offers efficiency, privacy, and finality, qualities that complement the ELRC’s mission to ensure fairness and timely resolution.
At DKCO, we believe that justice and innovation thrive where fairness meets flexibility.
For inquiries on employment disputes, arbitration, contract drafting and interpretation, or dispute resolution strategy, contact info@dkco.africa or call +254 (20) 840 2377.